Targeting Customers for Profit: An Ensemble Learning Framework to Support Marketing Decision Making
IRTG 1792 Discussion Paper 2018-012
32 Pages Posted: 6 Mar 2018
Date Written: February 27, 2018
Marketing messages are most effective if they reach the right customers. Deciding which customers to contact is thus an important task in campaign planning. The paper focuses on empirical targeting models. We argue that common practices to develop such models do not account sufficiently for business goals. To remedy this, we propose profit-conscious ensemble selection, a modeling framework that integrates statistical learning principles and business objectives in the form of campaign profit maximization. The results of a comprehensive empirical study confirm the business value of the proposed approach in that it recommends substantially more profitable target groups than several benchmarks.
Keywords: Marketing Decision Support, Business Value, Profit-Analytics, Machine Learning
JEL Classification: C45, C55, M31
Suggested Citation: Suggested Citation